Compliance Update for Employers and Employees – Non-Competes under the Federal Trade Commission

Yesterday, the FTC issued a significant rule regarding non-compete agreements. This is a nationally applicable rule.

In a nutshell, the FTC's rule aims to bring more transparency and fairness to non-compete agreements, ensuring they're used appropriately and not to stifle competition or restrict an employee's ability to change jobs. While this is a new rule nationally, any stricter rules under state law will still apply to those under such a state's jurisdiction.

Here are the basics to know about the new federal rule:

• Non-competes must be tailored to protect legitimate business interests.

• They should be disclosed before a job offer is accepted.

• Employees should have ample time to review and seek legal advice.

• Unreasonable restrictions could face scrutiny.

• Employers should review past non-compete agreements and may need to notify employees of the new rule's effect on them.

The rule goes into effect in 120 days. We expect legal challenges to be filed in federal courts to invalidate or limit this new rule, so stay tuned!

Nebraska employers who are abiding by Nebraska legal requirements for their non-compete and non-solicitation agreements are likely already compliant with this new federal rule. Nebraska has long required that non-competes be narrowly focused, permitting employers to prohibit from soliciting customers, clients, vendors, and employees for a limited period after their departure. Nebraska courts will not enforce generalized non-competes that amount to industry bans. Of course, some nuances could affect a particular employer or employee differently, and legal advice should always be sought.

The FTC's press release is available here: FTC Announces Rule Banning Non-competes | Federal Trade Commission.

At ES Law, we're committed to helping you stay compliant and navigate these changes smoothly. Contact us today to ensure your non-compete agreements align with the latest regulations.

Nebraska Paid Sick Leave Initiative: What Employers Need to Know

As the 2024 elections approach, several ballot initiatives are gaining momentum in Nebraska, with one particular initiative standing out - the Paid Sick Leave for Nebraskans. This initiative, if passed by the majority of Nebraska voters in November 2024, would significantly impact employers across the state. Here's what employers need to know to prepare for this potential change.

Key Provisions of the Paid Sick Leave Initiative:

1. Accrual of Paid Sick Leave: Under this initiative, all Nebraska businesses would be required to offer paid sick leave to employees. Employees would earn one hour of paid sick leave for every 30 hours worked.

2. Carryover of Unused Leave: Employees may carry over unused paid sick leave to the following year, but it should not exceed the maximum number of hours specified in the policy.

3. Protection from Retaliation: The initiative would put into law the ability for employees to earn and use paid sick days without retaliation.

4. Effective Date: If passed, paid sick leave would go into effect on October 1, 2025.

5. Exemptions: This policy would not interfere with collective bargaining agreements, contracts, or policies that provide employees with more generous paid sick time. It also does not apply to federal, state, or county employees.

Who Benefits:

Paid sick leave is aimed at benefiting working families and businesses alike. It ensures that employees do not have to choose between their paycheck and their family's health. It applies to full-time, part-time, and temporary employees. Businesses can benefit because paid sick leave may help attract a qualified workforce to the many open jobs across Nebraska, including appealing to workers from other states.   

Leave Entitlements:

Under the proposal, the amount of paid sick leave employees would earn varies depending on the size of the employer:

• For employers with fewer than 20 employees, workers may earn up to five days of paid sick leave per year.

• For employers with 20 or more employees, workers may earn up to seven days of paid sick leave per year.

Funding and Support:

The Paid Sick Leave for Nebraskans initiative has gained significant funding support, raising more than $1.7 million since its launch in July. The Sixteen Thirty Fund, a national organization supporting social change goals, has contributed over $1.6 million to the campaign. Local groups such as the Nebraska Appleseed Action Fund, the Women's Fund of Omaha, the Civic Engagement Table, the ACLU of Nebraska Foundation, and Raise the Wage Nebraska have also supported the campaign.

Implications for Employers:

Employers in Nebraska should be aware of the potential changes brought about by the Paid Sick Leave for Nebraskans initiative. If the initiative passes, businesses will need to adjust their policies and practices to comply with the new paid sick leave requirements. This may include implementing a tracking system for accrued leave, ensuring compliance with carryover limits, and updating company policies to prevent retaliation against employees for using paid sick leave.

In conclusion, the Paid Sick Leave for Nebraskans initiative has the potential to impact employers significantly. With fundraising support and growing public interest, this initiative could change the landscape of paid leave in the state. Employers should stay informed about the progress of this initiative and be prepared to adapt their policies accordingly if it becomes law in Nebraska.